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Do public subsidies stimulate private R&D spending?

Xulia González () and Consuelo Pazó ()

No 601, Working Papers from Universidade de Vigo, Departamento de Economía Aplicada

Abstract: The objective of this paper is to contribute to the empirical literature that evaluates the effects of public R&D support on private R&D investment. We apply a matching approach to analyze the effects of public R&D support in Spanish manufacturing firms. We examine whether or not the effects are different depending on the firms’ size and the technological level of the sectors in which the firms operate. We evaluate the effect of R&D subsidies on the subsidized firms, considering both the effect of subsidies on firms that would have performed R&D in the absence of public support and also the effect of inducement to undertake R&D activities. We also analyze the effect that concession of subsidies might have on firms which do not enjoy this type of support. The main conclusions indicate absence of “crowding-out”, either full or partial, between public and private spending and that some firms - mainly small and operating in low technology sectors - might not have engaged in R&D activities in the absence of subsidies.

Keywords: R&D; subsidies; matching estimator (search for similar items in EconPapers)
JEL-codes: O32 L1 C21 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2005-12
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Citations: View citations in EconPapers (5) Track citations by RSS feed

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Journal Article: Do public subsidies stimulate private R&D spending? (2008) Downloads
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